🎧 Listen to This Article
China is experiencing a sharp surge in duty-free sales, driven by a strong rebound in inbound tourism following the introduction of expanded tax refund policies and visa-free entry programs. These reforms are not only revitalizing the tourism sector but also offering substantial economic gains, particularly through tax-exempt retail activity.
Simplified Tax Refunds Drive Tourism-Related Spending
In a significant policy shift, China has streamlined its tax refund system for foreign visitors, allowing immediate refunds at retail stores—eliminating the need for airport processing. This “buy now, refund now” model has been widely embraced by international travelers, accelerating sales of duty-free goods nationwide.
The minimum spending threshold for tax refunds has also been lowered, from 500 yuan (approximately US$69) to 200 yuan per transaction, making tax-free shopping more accessible to a wider range of visitors. Furthermore, the number of authorized retailers and eligible regions for tax refunds has expanded significantly since the program’s launch in April 2025.
Visa-Free Access Fuels Inbound Visitor Growth
Complementing the tax reforms, China has broadened its visa-free entry policy to cover travelers from 47 countries, allowing stays of up to 30 days without a visa. This policy has sparked a sharp increase in international arrivals throughout 2025, especially in major cities such as Shanghai and Beijing.
According to official data:
- Shanghai welcomed 4.25 million international visitors in the first half of 2025—a 38.5% increase year-on-year.
- Beijing reported 2.46 million foreign arrivals during the same period, marking a 48.8% surge.
These figures reflect a broad recovery in China’s inbound tourism, with visitor numbers now reaching approximately 70% to 80% of pre-pandemic levels.
Retail and Tourism Sectors See Strong Gains
Tax-exempt retail sales to international travelers jumped by 85% in the first half of 2025 compared to the same period last year, particularly under the new instant refund system. Monthly duty-free sales to foreign visitors have consistently exceeded 100 million yuan, highlighting sustained demand for tax-free goods.
These positive trends are reshaping China’s tourism economy, which had previously suffered from pandemic-related travel restrictions and complex visa processes. The combination of easier entry, tax incentives, and improved digital payment options has significantly enhanced the visitor experience.
Long-Term Economic Potential Remains High
Despite the strong rebound, China’s inbound tourism still represents a modest share of its overall economy—contributing less than 0.5% of GDP, compared to 1–2% in countries like the United States.
Experts suggest that aligning with global benchmarks could unlock additional revenue of 1 to 2 trillion yuan for China, making inbound tourism a key pillar of future economic growth.
Ongoing Policy Reforms and Investment Required
While current measures have successfully stimulated tourism and retail activity, further reforms are considered crucial to sustaining growth. Key areas for improvement include:
- Enhancing multilingual services and tourist infrastructure
- Expanding digital payment access for foreign visitors
- Strengthening global marketing and promotional campaigns
As China continues to refine its tourism policies, the country is well-positioned to become a leading global destination, leveraging tax incentives and visitor-friendly policies to fuel long-term economic expansion.
For further details, clarification, contributions, or any concerns regarding this article, please get in touch with us at editorial@tax.news. We value your feedback and are committed to providing accurate and timely information. Please note that our privacy policy will handle all inquiries.
